Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
As Big Yellow Group Plc (LON:BYG) released its earnings announcement on 31 March 2019, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 23% in the upcoming year relative to the past 5-year average growth rate of 10%. Currently with trailing-twelve-month earnings of UK£127m, we can expect this to reach UK£155m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Big Yellow Group in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect Big Yellow Group to keep growing?
The 7 analysts covering BYG view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of UK£127m and the final forecast of UK£173m by 2022, the annual rate of growth for BYG’s earnings is 8.4%. EPS reaches £1.31 in the final year of forecast compared to the current £0.78 EPS today. With a current profit margin of 100%, this movement will result in a margin of 115% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Big Yellow Group, I've put together three essential factors you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Big Yellow Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Big Yellow Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Big Yellow Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.